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Lawyers who fail to file tax returns face more than the wrath of the Internal Revenue Service.
A recent case from South Carolina demonstrates that by failing to follow tax law, attorneys also violate state rules of professional responsibility.
And for law firms, especially small practices, the loss of an attorney's revenue because of a suspension or other disciplinary action could pose significant business problems.
One complicating factor is that some law firms that are structured as LLPs or LLCs issue partners K-1 tax forms and not W-2s, meaning that a firm may not know if its partners are informing the IRS of the correct amount of their income - or filing their taxes at all.
In the South Carolina case, a lawyer pled guilty to one count of failure to file his state income tax returns and paid a fine as well as the taxes he owed.
Then, the state bar sanctioned the attorney with a 90-day suspension for violating multiple state rules.
The attorney admitted that he violated Rule 8.4(b), which states that lawyers shall not engage in conduct that is prejudicial to the administration of justice.
But the court additionally found that he violated Rule 8.4(a) - which states that lawyers shall not commit criminal acts that reflect adversely on their honesty, trustworthiness or fitness - and Rule 8.4(d) -...